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As Battle Rages Over Recess Appointments, Board Confronts Choices

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A Jan. 25 ruling by the U.S. Court of Appeals for the District of Columbia
Circuit that two of the three current members of the National Labor Relations
Board were given unconstitutional recess appointments has drawn praise from some
NLRB critics and criticism from some of the board's supporters, but the decision
leaves the board and the Obama administration with looming deadlines and
decisions to make.

In a speech on the Senate floor Jan. 28, Sen. Lamar Alexander (R-Tenn.), now
the ranking Republican on the Senate Health, Education, Labor, and Pensions
Committee, called on Members Sharon Block (D) and Richard F. Griffin (D) to
“pack their bags and go home.”

But Chairman Mark Gaston Pearce (D) said Jan. 25 that the board will continue
to decide cases despite the ruling in Noel
Canning Div. of Noel Corp. v. NLRB, D.C. Cir., No. 12-1115, 1/25/13 (64
BTM 33, 1/29/13). Pearce noted there are 12 cases pending in other federal
circuits on the constitutionality of the Block and Griffin appointments.

The government's first decision may be whether to seek rehearing in the D.C.
Circuit of the three-judge panel decision or to file an early petition for
review by the U.S. Supreme Court. But the implications of the ruling may be felt
even before that decision is made.

Court Found Appointments Invalid

Writing for the appeals court, Judge David B. Sentelle said the recess
appointment power of the president described in the U.S. Constitution applies
only during an “intersession” recess between the first and second sessions of
the Senate, not during intrasession adjournments of the congressional body.

Block, Griffin, and Terence F. Flynn (R), who resigned last year, were
appointed after the opening of the second session of the 112th Congress, and the
court found the appointments were unconstitutional.

The court also observed that the Constitution's recess appointments provision
only permits the president to fill a vacancy “that may happen during the
Recess,” and found that the NLRB vacancies did not meet the test, which the
court said referred to the onset or beginning of a vacancy, not merely its
continuation.

Reaction Animated

Reaction to the decision on Jan. 25 was animated, and the ruling continues to
be controversial.

Sen. Lamar Alexander (R-Tenn.), now the ranking Republican on
the Senate Health, Education, Labor and Pensions Committee, called on Members
Sharon Block (D) and Richard F. Griffin (D) to “pack their bags and go
home.”

In his remarks on the Senate floor, Alexander charged that Pearce effectively
said the board should remain “open for business” despite the Noel Canning
decision. Alexander, on the other hand, said “the board should take down its
'open for business' sign and replace it with one that says 'Help wanted:
accepting nominations.' ”

Alexander said that if Block and Griffin step down, NLRB will be left without
a board quorum, but he asserted that regional offices would be able to process
unfair labor practice charges and complaints as well as representation cases
while the Senate considered new nominations by President Obama.

The ranking Republican on the Senate HELP committee pledged “speedy
consideration” of such nominations.

The Wall Street Journal also targeted Pearce's remarks about Noel
Canning in a Jan. 29 editorial stating that “the NLRB declares that it will
keep doing business as if nothing happened.”

Noting a call by Sen. Mike Johanns (R-Neb.) for Block and Griffin to resign,
the editorial said: “If they don't, Congress should stop funding the NLRB as
soon as the continuing spending resolution expires in March.”

But attorney and New Yorker staff writer Jeffrey Toobin the same day
posted a comment on the magazine's blog calling the ruling against NLRB a
“judicial atrocity” and arguing that if Senate Republicans now simply refuse to
act on nominations to agencies such as NLRB, the president will be powerless to
respond.

AFL-CIO Blast the Decision

AFL-CIO President Richard Trumka issued a statement calling the ruling
“nothing less than shocking.”

Asserting President George W. Bush made 179 appointments and President
Clinton made 139 appointments “to keep agencies functioning and make the
government work,” Trumka said he expects the decision to be overruled.

“In the meantime,” Trumka said, “the appointees to the National Labor
Relations Board remain in their jobs and the NLRB remains open for
business.”

Immediate Consequences

Ronald Meisburg, a partner representing employers at Proskauer in Washington,
D.C., and a former NLRB general counsel and board member, told BNA Jan. 25 that
the dispute over the president's power to make recess appointments “will
undoubtedly have to be finally resolved by the Supreme Court, because it
recognizes a serious constitutional limitation on the power of the President to
make recess appointments to any federal position.”

But for NLRB, Meisburg said, the consequences of the court decision are
immediate and significant. The “validity of any decision issued by the NLRB in
the last year is now called into question, as well as the Board's power to issue
decisions going forward,” he said.

“The other activities of the NLRB, such as the prosecution of unfair labor
practice cases and the processing of representation petitions by the Regional
Offices, will continue, but the ability to obtain Board review is effectively
eviscerated, at least for the time being.”

D.C. Circuit Holding Other Cases

The D.C. Circuit, perhaps anticipating the impact of Noel Canning,
acted quickly in a number of other cases pending in the appellate court.

The National Labor Relations Act, 29 U.S.C. § 160(e), allows the board to
petition for court enforcement of its orders in federal circuits where an unfair
labor practice occurred or where a charged employer or union resides or
transacts business.

But Section 10(f) of the act, 29 U.S.C. § 160(f), also allows a “person
aggrieved” by a final NLRB order to petition for review in the D.C. Circuit.
Parties desiring review of NLRB decisions will likely consider the D.C. Circuit
an attractive venue because of the court's issuance of Noel Canning and
the absence of decided cases in the other circuits.

The D.C. Circuit already had dozens of petitions for review of NLRB decisions
pending before Noel Canning was announced, including a number that were
decided by NLRB panels that depended on Block, Flynn, or Griffin to make up a
quorum.

On Jan. 25, shortly after releasing Noel Canning, the appeals court
issued orders “on the court's own motion” holding many of the pending NLRA cases
“in abeyance pending further order of the court.”

The court's action includes petitions for review of a number of significant
board decisions such as Banner Health System d/b/a Banner Estrella Medical
Center, 358 N.L.R.B. No. 93, 193 LRRM 1161 (2012), American Baptist Homes
of the West d/b/a Piedmont Gardens, 359 N.L.R.B. No. 46 (2012), and other
cases decided in the past few months by board panels that included recess
appointees.

The board held in Banner Estrella that a hospital illegally interfered
with employees' NLRA rights by asking them not to talk to co-workers about
internal complaints under investigation by management. In Piedmont
Gardens, NLRB overruled a longstanding precedent that denied labor
organization representatives access to witness statements obtained by unionized
employers, finding the board should balance the interests of unions and
employers in deciding such issues.

The court's one-sentence orders in pending cases gave no indication of how
long the cases will be held or how they may be resolved.

Due for More Scrutiny

The validity of the Block, Flynn, and Griffin appointments has been raised in
other circuits, and oral arguments are expected in March in the U.S. Court of
Appeals for the Third Circuit in New Vista Nursing and Rehabilitation v.
NLRB, No. 12-1936. In that case, the employer is also relying on the recess
appointments to argue that NLRB orders should not be enforced.

But Marshall B. Babson, who represents management at Seyfarth Shaw in New
York, told BNA Jan. 29 that the impact of the Noel Canning decision may
be tested as early as Feb. 5 when the Fifth Circuit hears oral argument in
D.R. Horton Inc. v. NLRB, 5th Cir., No. 12-60031, where a home builder is
seeking review of NLRB's ruling (357 N.L.R.B. No. 184, 192 LRRM 1137 (2012); 63
BTM 17, 1/17/12) that the company interfered with employee rights in violation
of Section 8(a)(1) of the NLRA by maintaining a mandatory arbitration agreement
that waived the rights of employees to participate in class or collective
actions.

Horton was decided Jan. 3, 2012, by a board that consisted of Pearce
and Members Brian E. Hayes--a Senate-confirmed Republican--and Craig Becker--a
Democrat who was recess-appointed to the board in March 2010--but Hayes was
recused from participating in the decision.

Babson, a Democrat who served on the board from July 1985 to July 1988,
pointed out that Becker received an intrasession recess appointment. Horton is
disputing the end of Becker's appointment and his authority to decide cases on
the date the Horton ruling was issued, but Babson said the Fifth Circuit
will be asked to consider the fact that Becker held the kind of appointment that
was found invalid in Noel Canning.

Of course, Babson added, the court in Noel Canning first addressed
NLRB's unfair labor practice findings against the company before reaching the
constitutional issue of the board member appointments. If the Fifth Circuit
decides that NLRB's position on mandatory arbitration is incorrect, Babson
noted, the court may never reach the question of the recess appointments.

Dates for NLRB Action

NLRB has an option of requesting rehearing in the D.C. Circuit either by the
three-judge panel that issued the Jan. 25 decision or by the full court. A
petition for rehearing would be due by March 11.

The board could also file a petition for Supreme Court review within 90 days
of the D.C. Circuit's Jan. 25 ruling or 90 days of the appeals court's denying
rehearing in the case.

Babson told BNA that in some cases there may be a tactical reason for
requesting a circuit court rehearing even if the request is unsuccessful, but he
said the ability of employers and unions to obtain review of NLRB decisions in
the D.C. Circuit adds some urgency to the situation, as suggested by the
appellate court's quick action to hold other cases in abeyance.

Babson said he believes there is a “very compelling argument” for NLRB to
take the recess appointment issue to the Supreme Court for clarification of
“these important issues.”

Bill Would Halt NLRB Action

Finally, in response to the D.C. Circuit decision, Alexander and two other
Republican senators Jan. 31 introduced legislation (S. 190) that would
bar NLRB from using government funds to perform functions that require a quorum
of board members, including issuing decisions.

A group of 40 Republican senators also sent a letter Jan. 31 to
the two board members who took their seats under recess appointments, Block and
Griffin, asking them to “immediately” leave the board, “withdraw from all Board
activities and stop drawing salaries and other benefits associated with the
positions you purport to hold, as your purported appointments have been found
constitutionally invalid.”

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